The Dominican Republic is a middle-income country, with the largest economy of Central America and the Caribbean. The country has weathered the global economic crisis well and in 2010 experienced one of the highest growth rates in the region.
Read More »

This paper summarizes the results of the
impact evaluation of the Access to Information pilot project
on empowerment of citizens in poor municipalities in the
Dominican... Show More + Republic. Among the dimensions of empowerment
investigated are civic knowledge, awareness and use of the
right to information, perceptions of and trust in public
services and institutions, civic participation, and measures
of local governance. Data were collected in two rounds: a
baseline round at the end of 2010 and a follow-up round in
mid-2012. No impact is found on awareness and the use of
information under the specific Access to Information rules.
However, it is observed that individuals address more
general complaints to governments as a result of the Access
to Information program regardless of whether these are
classified under the ATI law or not. Some positive and
statistically significant impacts are found on local
government responsiveness, prioritization and decisions
about the municipal budget, and trust in and satisfaction
with some local government services. Show Less -

This paper tries to uncover some of the
hidden factors behind poor public service delivery in the
Dominican Republic. By looking at three sector cases,
education, health... Show More + and electricity, it is possible to observe
that in this setting of low quality of public services the
"middle class" is opting out from the system and
adopting private solutions to collective problems. The
combination of this opting out behavior with low levels of
institutional trust, especially among "middle
class" members, fragmented interests and clientelism,
among other factors, results in weak collective action and
lack of effective demand for improvements in service
provision. Some of the tentative policy options to break
this sub-optimal equilibrium are i) to build capacity in
civil society organizations and help them forming a
pro-reform coalition, ii) reduce the gap between the middle
class and the poorer by trying to improve the provision of
public goods and enlarging the welfare state, and (iii)
increase transparency mechanisms and introduce e-government
formulas in order to optimize the allocation of public resources. Show Less -

The Dominican Republic-Central American
Free Trade Agreement with the United States aims to create a
free trade zone for economic development. The Agreement is
expected... Show More + to intensify commerce and investment among the
participating countries. This paper analyzes the changes in
the production and trading patterns in 2-digit manufacturing
sectors with the goal of understanding the short-term
environmental implications of the Dominican Republic-Central
American Free Trade Agreement. More specifically, the paper
addresses the questions: Did pollution increase in the
period after the Agreement negotiations? Did trade and
production shift toward pollution intensive factors? The
results suggest an increase in pollution emissions in the
post-negotiations period. The increase in emissions is
mainly attributable to scale effects. Composition effects
are small and in some cases (including Nicaragua and
Honduras) favoring cleaner industries and partially
compensating the pollution gains from output and export growth. Show Less -

This paper examines the export behavior
of Dominican Republic exporters following the implementation
of the Dominican Republic-Central America Free Trade
Agreement in... Show More + 2007. Using a firm-level dataset for 2002-2009,
the authors investigate the effects of a tariff reduction on
the extensive margin. The analysis distinguishes the impact
on the entry of new firms, exports of new products, and
entry into the Agreements markets. The paper analyzes
whether the agreement prevents incumbent exporters from
exiting the market. The results suggest that tariff cuts had
a positive although very small effect on the extensive
margin. A decline in tariffs also seems to reduce the
probability of exit, but the effect is also small. The
evidence calls for complementary policies aiming at helping
exporters maximize the benefits of the agreement. Show Less -

This paper offers a preliminary
assessment of the potential benefits and costs of an
economic and monetary union (EMU) between the Dominican
Republic and Haiti -- two... Show More + countries sharing the same island
but whose history is one of conflict and divergent economic
prospects in recent decades. After a brief review of the
historical context, it examines the nature of these
potential benefits and costs. It then conducts a preliminary
analysis (using basic statistical techniques) of some key
criteria for the formation of an economic and monetary union
between the two countries. A more formal analysis of
business cycle synchronization, based on basic and extended
integrated vector auto-regression models with exogenous
variables (VARX), is developed next. Overall, the analysis
suggests that at this stage several economic criteria are
not satisfied for the two countries to fully benefit from an
economic and monetary union. At the same time, however, the
endogeneity of most of these criteria (including the degree
of business cycle synchronization) militates in favor of an
aggressive medium-term agenda for integration between them. Show Less -

The main objective of this paper is to
provide an ex-ante assessment of the poverty and income
distribution impacts of the Central American Free Trade Area
agreement... Show More + on Nicaragua. The authors use a general
equilibrium macro model to simulate trade reform scenarios
and estimate their price effects, while a micro-module maps
these price changes into real income changes at the
individual household level. A useful insight from this
analysis is that even if the final total impact on poverty
is not too large, its dispersion across households-due to
their heterogeneity of factor endowments, inputs use,
commodity production, and consumption preferences-is
significant and should be taken into account when designing
compensatory policies. Additionally, growth and
redistribution decomposition show that, at least in the
short to medium run, redistribution can be as important as
growth. The main policy message that emerges from the paper
is that Nicaragua should consider enlarging its own
liberalization to countries other than the United States to
boost trade-induced poverty reductions. Show Less -

An estimated 80,000-100,000 Dominican
farmers produce coffee and cocoa, nearly 40 percent of all
agricultural producers. The sectors also provide employment
for tens... Show More + of thousands of field laborers and persons employed
in linked economic activities. The majority of coffee and
cocoa producers are small-scale and most are located in
environmentally sensitive watersheds. Recent trends in
international commodity markets have challenged the survival
of both sectors. Production is characterized by low yields
and uneven quality, while periodic hurricanes have
contributed to a lackluster and unstable record of output
and exports. Despite these conditions, most experts
acknowledge the fact that appropriate agro-ecological
conditions exist in Dominican Republic for production of
high-quality coffee and cocoa. To be competitive and
sustainable, some changes must take place in the coffee and
cocoa sectors. The objective of this study is to provide an
overview of the coffee and cocoa sectors, to identify major
problems, and to suggest possible strategies to deal with
these problems. The authors conclude that if the objectives
of the government are poverty reduction, environmental
protection and overall well-being of rural society, it is
critical to move beyond a commodity-specific approach to a
broader rural development focus on households, regions and
environments where coffee and cocoa are currently being grown. Show Less -

While the level of international
migration and remittances continues to grow, data on
international migration remains unreliable. At the
international level, there is... Show More + no consistent set of
statistics on the number or skill characteristics of
international migrants. At the national level, most
labor-exporting countries do not collect data on their
migrants. Adams tries to overcome these problems by
constructing a new data set of 24 large, labor-exporting
countries and using estimates of migration and educational
attainment based on United States and OECD records. He uses
these new data to address the key policy question: How
pervasive is the brain drain from labor-exporting countries?
Three basic findings emerge: With respect to legal
migration, international migration involves the movement of
the educated. The vast majority of migrants to both the
United States and the OECD have a secondary (high school)
education or higher. While migrants are well-educated,
international migration does not tend to take a very high
proportion of the best educated. For 22 of the 33 countries
in which educational attainment data can be estimated, less
than 10 percent of the best educated (tertiary-educated)
population of labor-exporting countries has migrated. For a
handful of labor-exporting countries, international
migration does cause brain drain. For example, for the five
Latin American countries (Dominican Republic, El Salvador,
Guatemala, Jamaica and Mexico) located closest to the United
States, migration takes a large share of the best educated.
This finding suggests that more work needs to be done on the
relationship between brain drain, geographical proximity to
labor-receiving countries, and the size of the (educated)
population of labor-exporting countries. Show Less -

The authors study the economic
performance of ten Caribbean islands in two groups: six
small islands from the Organization of Eastern Caribbean
States (OECS) and four... Show More + larger islands: Barbados, Dominican
Republic, Jamaica, and Trinidad and Tobago. They compute
external shocks together with each island's performance
response to them. Some islands resorted inordinately to
external financing to cope with adverse shocks. Others tried
to compensate by stimulating exports and tourism. The
buildup of debt created problems for some of the governments
later in the decade, resulting in the need for strong
contractionary measures. But the difference in performance
between islands cannot be explained by external shocks
alone. The OECS group achieved superior performance even
though they faced roughly the same shocks as the larger
islands. It helped that they had a monetary board that
encouraged high investment levels. But this was complemented
by concessionary flows used productively and by foreign
direct investment. Now the question is how well these
economies will fare when they face the inevitable reduction
in concessionary flows in coming years. Show Less -

Measuring costs in public hospitals in
developing countries is hampered by the lack of an
appropriate costing system, or of any systematic cost
accounting. Invoices... Show More + for goods and services, prices for
inputs, and patient records are generally absent. As a
result, cost measures have historically been based on budget
figures - the only available financial data. But budget
allocations bear little relationship to the resources
actually required to provide services to hospital patients.
The patient-based methodology described by the authors
circumvents this problem by measuring actual hospital
resources allocated to patients. Their study was conducted
in a single Dominican hospital during a one week period in
April 1989. Their approach documents and gives prices for
goods, services, and personnel time provided by the hospital
to emergency patients, inpatients, and outpatients. They
used the following to measure quality and efficiency: (a)
the qualifications and relative costs of medical manpower
delivering services; (b) the extent and nature of shortages;
(c) comparisons of physician orders and actual services
provided; and (d) (for selected diagnoses) the specifics of
clinical practices in the hospital, compared with accepted
clinical norms for the Dominican Republic. They found that
average and total costs of services understate the true
costs - because of shortages, inappropriate and underused
personnel, and nonfunctioning equipment. Quality of care
measures suggest low quality and poor efficiency. Norms of
medical practice were not followed in more than 80 percent
of the cases examined. Rates of completion for diagnostic
tests were below 50 percent for outpatient services and
between 60 and 70 percent for inpatient and emergency
services. The study registered significant monthly savings
of $641 for noncompletion of tests and $824 for
nonavailability of drugs. Policy recommendations of the
authors center on the need to reform the organization and
delivery of health care as well as physician payment
practices - and to giving more authority to hospital
administrators. To make Dominican hospitals more efficient,
there must be greater authority and accountability for
hospital directors and better incentives for improving
medical and management performance. Quality assurance needs
great improvement if the Dominican system is to ensure a
basic standard of care. Show Less -

Using statistical methods to adjust for
a bias in selectivity, this paper analyzes the relative
effectiveness and cost-effectiveness of public schools and
two types... Show More + of private schools - elite and non-elite - in the
Dominican Republic. Controlling for selection, it found
that students in eighth grade mathematics achieve more in
both types of private school than they do in public schools,
and achieve more in elite than in non-elite schools.
Differences in teachers' backgrounds and teaching
practices account for some of this difference in
achievement, but differences in the students' peer
background characteristics are substantially more important.
Both types of private schools appear to be more
cost-effective than public schools. Show Less -

Coffee is an important crop for the
Dominican Republic, accounting for an average of 11 percent
of total exports by value during 1982-84. But for the last
10 years,... Show More + coffee yields have been low, and production and
exports stagnant. If current policies for coffee continue,
production and exports are likely to decline even further
and the Dominican Republic could have trouble filling its
export quota under the International Coffee Agreement (ICA).
This paper sees the high tax on coffee exports as the main
disincentive to growth in coffee production. With a small
econometric model of the Dominican coffee sector, the paper
simulates the impact of export tax reductions under
different assumptions about the operation of the ICA export
quota system. The model suggests that if the ICA is
continued, an export tax cut of 52 percent would produce the
desired production level (to meet projected quota and
nonquota export demand) by 2000. If the ICA is discontinued,
the export tax must be eliminated to achieve the same
production level. Show Less -